Is there a Housing Bubble?

It seems anywhere I go lately, people are asking me if there is a real estate bubble. Before I give you my thoughts, it first helps to explain exactly what is a “real estate bubble.” In its simplest form, a real estate bubble or housing bubble for residential markets is characterized by significant price increases of homes until they reach such levels unsustainable by incomes and other economic indicators. The general fear is if there is a real estate bubble and it “bursts,” homeowners and investors experience valuation decreases that can result in many owners holding negative equity (a mortgage debt higher than the value of the property).

 

The housing bubble and credit crisis we experienced in 2009 was horrible. During that time we experienced low mortgage interest rates, low short-term interest rates, and relaxed standards for mortgage loans. Today, interest rates currently remain low, but the government has imposed more stringent mortgage requirements and more money down on home purchases which should prevent that type of crash from repeating itself. People are asking the housing bubble question because we’re seeing mixed signals in this spring/summer buying and selling season. While there’s solid, strong demand for housing, low supply has escalated prices that could lead to lower than expected homes sales. However, we are still seeing very strong sales so I don’t believe there is a housing bubble currently in the Conejo Valley or beyond. “We see no housing bubble in Southern California,” says Ralph DeFranco, chief economist for Arch MI’s owner, Arch Capital. “Even though homes feel expensive, they are supported by the amount of income people have.”[1] The increases in home sales prices here are real. It’s real buyers with real income who are able to qualify for loans under the new strict guidelines and put 20% equity down in their purchase. I believe it is still a good time to buy a home or investment property. Interest rates currently remain low and you may get a tax deduction from your mortgage which makes it advantageous. Inventory in the Conejo Valley is also starting to increase some so finding a home that fits your lifestyle and taste may be easier than you think. Home prices will routinely fluctuate between 5%-10% which is historically normal and, over the course of time, evens itself out. That’s why it is important to be smart about making your home purchase and hire a reputable, highly rated realtor to help guide you in choosing the right home for you so that you can begin to enjoy and reap all the benefits of home ownership. If you have any questions, thoughts or need additional information, please call Lydia Gable of Lydia Gable Realty Group at 818-383-4335.

[1] Jonathan Lansner, “Housing bubble ahead for SoCal? Unlikely, report says” http://www.ocregister.com/articles/percent-721070-risk-arch.html (June 30, 2016).
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Tuesday Tips – June 21, 2016

 

We are so excited to roll out a new online tool called Homekeeper to our clients as an added value. It’s you online source for all of our recommended vendors for repairs, home improvements, inspections and more. Please contact me (lydia@lydiagable.com or 818-383-4335) if you would like to have access. Here for you and your home always!

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Ask Lydia: Your Home Value – Is Zillow Accurate?

Real estate inventory in the Conejo Valley is historically low which means its still a seller’s market. It’s the summer season and interest rates remain low. There’s been talk that the Feds will raise rates by the end of the year, but right now buyers are buying and multiple offers are happening on well-priced homes. If you have been thinking of downsizing (or even upsizing), selling your home now can be to your advantage. Of course, when you begin to consider selling, some questions come to mind and I hope my thoughts below are helpful. If you have more specific questions pertaining to your home, please contact me at 818-383-4335 or ask away at asklydia@lydiagable.com as I am here for you and your home always.

How accurate is the Zillow zestimate?

Use the online home valuation tools as a beginning guide. Zillow just upgraded its valuation feature claiming it will be more accurate than before but it readily admits 50% will be off by more than 6% (it’s median rate of error)[1] It’s important that when selling a home, the value is determined by a top Realtor in your local area, not an internet website. A good Realtor will prepare a comparative market analysis (“CMA”) specific to your home. A CMA is an in-depth evaluation of recently sold “comparable” homes in the past 6-12 months and the valuation takes into account your home, it’s unique features, such as upgrades, backyards, views, and pools, the features of recently sold similar homes, the local area and neighborhood.

Should I price my home higher to leave room for negotiations?

In my mind, there are three strategies to price a home and I leave it up to the homeowner to decide what works. Price the home low with the hope of multiple offers. Price it right and it should sell quickly and close to its listing price. Price it high does leave room for negotiations, but you risk buyers hesitant to make an offer. In a tight market that we are in presently, my recommendation is to price it low or right. Remember, a good top Realtor will get you the most value for your home in the best time because he/she is an expert in your area. Happy selling and please don’t hesitate to let me know if you have any questions or need additional information: 818-383-4335.

[1] Todd Bishop, “Zillow Upgrade the Zestimate, promises lower error rate with newer algorithm,” http://www.geekwire.com/2016/zillow-launches-major-zestimate-update (June 8, 2016)

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Tuesday Tips – May 17, 2016: Toughest Part of Being a Realtor

Being a Realtor is a great job, but one of the toughest things I have to do is be honest with my clients and potential clients. You want me because I am an expert realtor and sometimes, honesty is not always something that people want to hear but it is usually something people need to hear when it comes to getting the highest price for your home in the best amount of time.

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Finding the Right Realtor

It’s the busiest time of the year in real estate. Spring. Selling your home can seem like a daunting task with getting the house ready to sell, finding a good realtor, having showings and then the actual paperwork and process of closing the transaction. Try not to get overwhelmed because selling your home doesn’t have to be an arduous process. In an effort to help you navigate through selling your home (or even buying one), one of the top realtors in Conejo Valley, Lydia Gable with Lydia Gable Realty Group at Keller Williams, will be here every month to answer your real estate questions. If you have a question you would like answered, please send it to asklydia@lydiagable.com and your question with its answer may be featured in the Acorn next month.

 

Question: How do I find a good realtor because there are so many out there? And do I even need one?

 

Answer: A home is so much more than four walls, a roof and memories. For most people, it represents one of your largest assets and any mistake in the transaction may be costly and/or time consuming. A licensed realtor by the National Association of Realtors has the most in depth and current knowledge of buying/selling homes and they are held to a strict code of ethics for honesty and non-discrimination. Selling a home usually requires dozens of forms, reports, disclosures, and other technical documents. A good realtor is a knowledgeable expert who will help you negotiate the best price, understand/decipher the contract and avoid delays and/or costly mistakes.

 

There are six things I recommend to evaluate when trying to find the right realtor for you:

  • Track record – do your homework: talk to family and friends for their recommendations and look to Zillow or other online searches for reviews of real estate agents to find ones that continually have strong ratings.
  • Marketing skills – Internet is the name of the game these days so you want your home marketed effectively on the internet, as well as with mailers and other forms of advertising.
  • Negotiation skills – find someone who will negotiate the highest price in the best amount of time.
  • Customer service – A good realtor is responsive to all of your questions and returns phones calls/emails in a timely manner. Buying or selling a home is a complex transaction with endless paperwork and forms that can go very smoothly in the right hands.
  • Honesty – It’s important to know the facts, not just what you want to hear, about the market, what buyers are looking for in a home, and home values.
  • Pulse on the market – look for a realtor who is actively buying/selling homes in your market so they are knowledgeable with current trends and can provide you with guidance along the process.

 

Be sure to interview a few realtors to make sure their personality fits with yours and that they make you feel like the important client that you are! Good luck finding the right realtor for you and happy home buying/selling. If you have any questions, I am happy to help you so please call me at 818-383-4335.

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Penchant for Pancakes

It’s National Pancake Day so it’s the perfect excuse to have pancakes for dinner. You could go ahead and grab the box pancake mix, but why not try this amazing and easy recipe. I promise you, you will never go back to a boxed mix again. Oh, and get prepared for the family to sing your praises. It’s that good.

Pancake Recipe

1 cup milk

2 Tbsp. white vinegar

1/2 cup white flour

1/2 cup whole wheat flour

3 Tbsp. sugar

1 tsp. baking powder

1/2 tsp. baking soda

1/2 tsp. salt

1 egg

2 Tbsp. melted butter

 

Add the vinegar to the milk and allow time to sour (I let it go while I get out all the other ingredients and and prepare the other dry ingredients )

Meanwhile, stir together all the dry ingredients. You can use 1 cup of regular white flour; I just use the Trader Joe’s white whole wheat flour because it makes them just a hint different and, well, slightly healthier.

Now add the melted butter and egg to the sour milk; then add the dry ingredients. Wisk together until just blended. Let the entire mixture sit for 1-2 minutes. Pour about 1/4 cup fulls of batter onto preheated and greased griddle. Once bubbles appear on the surface, flip with a spatula and then cook until golden on the reverse side.

If you have any questions, please let me know at asklydia@lydiagable.com. I am here for you and your home always.

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